After a decade of steady growth, Bangladesh local steelmakers are now facing tough times for a surge in production costs and a slowdown in consumption by both the government and private sector.

In addition, a low pressure of gas, depreciation of the taka, rising costs of raw materials and bank borrowing, and a tight liquidity situation have hurt the BDT 30,000 crore industry in recent months.

Mr SK Masadul Alam Masud chairman of Bangladesh Auto Re Rolling and Steel Mills Association said that “We're passing through a critical time. It seems there is nobody in the government to look into our issues.”

Mr Masud said the cost of producing a tonne of 60 grade rod has increased by BDT 18,000 between January 2011 and January 2012, mainly because of depreciation of the taka against the dollar. Steelmakers import at least 70% of raw materials.

The latest move on withdrawal of the upper cap on bank lending rates has also pushed production costs up.

Chairman of Bangladesh Auto Re Rolling and Steel Mills Association said that “The government accounts for nearly 40% of total steel consumption. Consumption has gone down significantly.”

(Sourced from www.thedailystar.net)